A Gallup survey last year found 70 percent of employees don't like what they do and are disengaged at work.

"It's not about money," Smith said. "Provide a sense of accomplishment or social status to get into the human psyche."

He contends social status will retain employees because they want to be valued by peers and acknowledged when they do the right thing.

Since Badgeville launched at TechCrunch Disrupt in 2010, it has grown to 300 customers, including Walmart, American Express and Oracle, and 60 employees.

"This is a real movement," Smith said.

Asked if the response to gamification varies, Smith said it works for top executives as well as millennials if the design is right.

Santa Cruz residents Ron Barr, 56, and his wife, Marti Mariette, who worked in marketing at Apple, started a company to help people improve their lives as they try different exercise regimens, dietary supplements, herbal remedies and new shampoos.

"It's hard to tell what's working and what's not," Barr said.

Their Life Correlations iPhone app lets people log their mood in connection with what they are doing, producing affirmations written by Mariette, the chief poetry officer, and messages such as "mornings are good for you."

Barr said he expects revenue from app sales and licensing and partnering with health businesses.

In another development, veteran game designer Graeme Devine has joined Magic Leap as vice president and will set up a studio in Santa Cruz dedicated to making games for the Cinematic Reality project.

Startup Hospitality Pulse at the Sash Mill in Santa Cruz is looking for a developer to work on a product to launch in June. NubeTrak, a Watsonville startup with a geolocational tracking system for the food supply chain, is looking for four or five developers.